The Reason of Ethereum's All-Time-High
The cryptocurrency world has seen a new wave in the adoption of decentralized tokens and coins, and this move is becoming widespread. As nations and business organizations are accepting cryptocurrencies in their operation, their widespread acceptance is of no doubt unquestionable. Now payment of commodity through the use of cryptocurrencies have become a norm, and recently we have seen organization invest in the crypto space. This move has signaled the change from Fiat to a more decentralized financial system that works on the technology of blockchain.
As cryptocurrencies grew in valuation, one of the big boys of cryptocurrency; Ethereum, decided to ride the high and move towards an increase in valuation. Ethereum, which is the second leading cryptocurrency in the world has seen its technology and application being accepted in the crypto space, as more developers are utilizing it in the development of decentralized finance (DeFi) and non-fungible tokens (NFTs). This saw the valuation of ETH reach an all-time high of $2736 during the April rally and is possibly pushing for the $3000 mark.
This move has raised the question on a lot of people's minds about how far this crypto big boy can reach and what are the possibilities. With some section of ardent crypto followers believing that ETH isn't a reliable coin, this post would focus on the reason why ETH broke its all-time high.
What is Ethereum?
In 2014, 8 people came together in Zug, Switzerland to co-found one of the biggest cryptocurrencies in the world; Ethereum. This meeting which would later take this innovation to the world and create a network that would lay a foundation for another developer to gain ground in the crypto space was convened. 8 years down the line, Ethereum has transcended technological boundaries and on its own amassed a market cap of $2.07T. Ethereum which is a decentralized open-source blockchain has its currency, which has ranked as the second most used cryptocurrency. As a pioneer of blockchain smart contracts, it has allowed other technology to be built on its network as the world works towards a decentralized environment.
Ethereum's Rise To Stardom
For a while now, Ethereum has been riding the same wave as other cryptocurrencies as the bullish trend is currently in session. This has seen the price of ETH and other cryptocurrencies rise beyond the last year, and a bid to stabilize before the bear run begins. This is visible with the way the total market capitalization of crypto has hit $2.07T, thereby proving that prices have seen a recent hike from the $2 trillion market cap of February. Now we can say that this is a general increase in all cryptocurrency, and isn't solely for ETH. Well, Ethereum has taken a whole new step in its operation, and we can see it in its newly released Ethereum 2.0.
The newly released Ethereum 2.0 staking has brought about a spike in the rate and amount of Ethereum that users are staking for our trading pairs. This new release on the ETH network was also designed to bring about scalability and security for the network which would be confirmed by the Proof-of-Stake (PoS) algorithm. Formerly, the Ethereum network was designed to work on Bitcoin's Proof-of-Work algorithm consensus which verifies blocks and morning coins. This move has seen a recent increase in the amount of Ethereum being staked which puts its number at 3.45M, and its total valuation totaling $7.4B. A major factor that makes the network run is the gas fee that is charged, and with the innovation, the gas fee is expected to be reduced for transactions on decentralized exchanges. A major player in the rise to stardom of this cryptocurrency is the recent acceptance of the Ethereum network by VISA utilizing USD Coin transaction on the network.
Ethereum: Owning the DeFi and NFT space
The new rave of DeFi has played a huge impact on the rise in the price of Ethereum, and both technologies have found a way to bypass the conventional methods of finance. DeFi which stands for Decentralized Finance is a trend which is designed to overturn the traditional way of how finance is handled in a decentralized environment without the interference of financial and government institution. This technology which is running on the blockchain network has given users a more secure and scalable way of bypassing the middleman in any transaction.
With the majority of DeFi being built on the Ethereum network, the cryptocurrency has seen a wide range of usage and acceptance. Now thousands of developers are working behind their screen trying to build a DeFi application that would be powered by Ethereum. Now since Ethereum can process smart contracts, the ability for the network to power a decentralized environment for transactions is possible. The smart contract is also processed through a conditional check before the transaction can be successful hence allowing its general acceptance.
Now, the same rule that makes DeFi run on the Ethereum network is also what powers NFTs. Since the acceptance of decentralized finance is the way forward, bringing that to nontechnology instance was needed and this is where NFT comes into play. Non-Fungible Token or NFTS are digitalized assets that have been converted to tokens and can be stored for value. Since they are digitalized assets, they can be any form of value which could include artwork, finance, copyrights, and the likes. Now since the technology expects that value should be added to a token, it needs to work hand in hand with DeFi which would place value on the digitized asset which would be paid for or transacted on a DeFi blockchain. This relationship creates a bond for owners of both assets, as the technology creates a level of trust which can be vouched for by a blockchain network such as Ethereum.
With the rise and acceptance of DeFi and NFTs by the general public, Ethereum has now become a staple name in the creation of both technologies. This has led to the recent price surge which has led Ethereum to break its ATH, as both DeFi and NFT are gaining traction and becoming more relevant.
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